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Report Finds Improvement in China Health Insurance Coverage

Posted on Dec 07, 2011 by Sergio Ulloa ()

A new study out of the United States shows that action taken by the Chinese government over the past two decades to improve access to medical facilities may have in turn allowed overall health insurance coverage to increase throughout the country between 1997 and 2006, with particularly strident gains found in rural areas during this time. The research was done by Brown University sociologist Susan Short and fellow alumnus Hongwei Xu, now at the University of Michigan, with the findings presented in the December issue of Health Affairs, a prominent medical policy journal. The study used data from the China Health and Nutrition Survey to analyze medical insurance coverage patterns in China over the past decade, with a particular focus on the diverging health behavior occurring among the country's rural and urban inhabitants. China's Health and Nutrition Survey tracks households across nine Chinese provinces that cumulatively represent over 40 percent of the country's population, so the findings should be widely applicable to the country at large. China's rapid economic development over the past few decades has worked to lift millions of people out of poverty and improve the country's overall health standards. This has manifested itself in an improved life expectancy at birth rate, which has risen from 69 years in 1990 to nearly 75 years by 2010 and a decrease in infant mortality, which declined from 37 per 1,000 live births in 1990 to 17 in 2009, amongst other favorable indicators. Despite this noted progress, however, many health issues in China remain unresolved. Chief amongst them are the large disparities that persist between the country's more affluent urban dwellers and poor urban and rural inhabitants in terms of access to medical services and quality of care. Many among the poor have limited their use of medical services for purely financial reasons, since the costs of treating a serious illness could wipe out a family's life savings. To address this problem, new insurance mechanisms are being implemented by the government to cover a significant portion of medical costs and to help lower the impact of high out-of-pocket payments. Xu and Short's report found that, overall, the number of Chinese citizens with some form of insurance policy increased moderately at the turn of the century, moving from 24 percent of the survey sample size in 1997 up to 28 percent by 2004. Over the past few years however the changes have been more dramatic, with insured individuals already representing 49 percent of all survey respondents by 2006. Moreover, since then, the gap between the rates of insured Chinese people between rural and urban areas has narrowed greatly. In the report, Xu and Short, both credit this as perhaps the most profound development occurring in Chinese healthcare over the past ten years, referring to the rise in rural health insurance coverage as "nothing short of dramatic." While the predicted probability of having health insurance improved in China between 2004 and 2006 for all locations in the nine provinces studied, rural areas had the most to gain. Susan Short wrote that millions of rural Chinese residents have likely benefited from increased coverage options so far. "There's been great concern about increasing inequality in China, and particularly urban-rural inequalities. This work shows that at least in one sphere, health insurance coverage, urban-rural inequality may be decreasing," Short added. Historically, location has been one of the defining factors over access to healthcare and cover in China. Xu and Short's analysis confirmed that the levels and trends regarding health insurance cover have been markedly different depending on whether the survey respondents were living in urban or rural areas in China at the time of the poll. The report found that coverage rates in rural villages fell from 1997 to 2000, while at the same time, the country's suburbs, cities and towns observed no such change. It was during this period, the report notes, that the Beijing government's new rural insurance system was still in undergoing its pilot phase and had not yet begun providing financial subsidies outside of a few select rural communities. After 2000 however, the level of health insurance coverage in rural areas rose sharply, from 17.9 percent in 2004 to 51 percent of all survey respondents by 2006, almost tripling the insurance penetration rate in the process. Survey data showed that coverage rates also rose quite significantly in smaller towns and suburbs at the same time, but changed little in China's now burgeoning cities. This remarkable rise in rural coverage rates has, according to the study, coincided with improved efforts by the Chinese government to develop more robust insurance initiatives and greater subsidies for the country's rural inhabitants. "It is especially impressive to see this pattern in data such as these, that follow the same individuals over time," Short said, adding that the changes now apparent in rural village coverage rates are surprising. "We are witnessing real change in many people's lives in the way that urban, and especially rural, individuals experience health insurance coverage." Despite the considerable increase in individual coverage that has occurred throughout China, the report notes that many disparities between rural and urban consumers still persist, particularly as it concerns reimbursement rates and overall quality of care. Xu and Short's analysis determined that urban residents in China continue to receive greater compensation on both their inpatient and outpatient claims, than their insured contemporaries from rural areas. However, the authors noted that these results should be interpreted with some caution due to a considerable number of incomplete self-reported reimbursement rates in the dataset. In his conclusion, Hongwei Xu, remarked that considerable progress has been made in the Chinese insurance industry. "The findings from this research highlight the recovery in health insurance coverage in general, and more importantly the significant reduction in the rural-urban inequality in the coverage in particular, largely due to the great efforts by the Chinese government, in a quite short time period," Xu said, adding that the advantage insured urban residents continue to hold over insured rural residents, shows that more work needs to done. "On the other hand, the suggestive finding of continued rural disadvantage in terms of health insurance benefits suggests we should not overestimate the success of the policy interventions." China's healthcare system going forward must tackle these challenges and more to continue to improve the quality of health care for the population at large. If insurers, both local and international, can work to effectively match the insurance demands of the Chinese people, cover against holes in the social safety net, and further encourage people to invest their considerable savings back into the market, they can share in this potential prosperity as well.
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